Kroger Intrinsic Value Calculator – Kroger Stock Is A Buy, Despite Unfavorable Merger

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I’m in favor of buying Kroger ($NYSE:KR) stock despite my unfavorable opinion of the merger they recently announced. As one of the top grocery store chains in the United States, Kroger has a long history of success and its stock has been a strong performer. The company offers a wide variety of products including fresh produce, meat, and dairy products, as well as an extensive selection of prepared meals and other items. Kroger is also an industry leader in terms of innovation, introducing new services such as online ordering and delivery. They have also developed a loyalty program that rewards customers for their purchases. This has resulted in strong customer loyalty and higher sales growth for the company. The company’s solid track record, strong innovation, and customer loyalty make it a great stock to buy in the long term.

Additionally, the merger could be beneficial in the long run if it leads to greater efficiency and cost savings.

Market Price

The stock opened at $43.0 and closed at $43.0, up 0.2% from its prior closing price of $42.9. The merger would have combined the two companies to form the largest supermarket chain in the United States and was seen by many as a way to strengthen Kroger‘s market share.

However, the merger fell apart due to antitrust worries from the Federal Trade Commission, leaving Kroger to stand alone in a highly competitive retail market. Despite this news, investors remain confident in Kroger’s future prospects. The company has taken steps to remain competitive, including investments in technology and digital infrastructure that improve customer experiences.

In addition, Kroger recently announced it was introducing an online meal-kit delivery service, which could potentially help the company improve its market share. Furthermore, analysts note that Kroger’s strong balance sheet and cash flow make it an attractive candidate for dividend increases and further investments in the business. With strong fundamentals and investments in the future of the company, investors can be confident that Kroger will remain a competitive retailer in the future. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Kroger. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Kroger. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Kroger. More…

Key Ratios Snapshot

Some of the financial key ratios for Kroger are shown below. More…

Analysis – Kroger Intrinsic Value Calculator

At GoodWhale, we have been analyzing KROGER’s fundamentals and have come up with a valuation recommendation. Our proprietary Valuation Line suggests that the intrinsic value of KROGER shares is around $48.4. Currently, KROGER shares are trading at $43.0, which represents a fair price that is undervalued by 11.2%. We believe this presents a great opportunity for investors to add KROGER to their portfolios at a discounted price. We have also studied KROGER’s historical performance in terms of revenue and earnings growth, free cash flow, working capital management, and other key metrics. Our research shows that KROGER has consistently delivered strong financial results and has a history of sound management. We believe KROGER is well-positioned to continue its success and reward investors in the future. Kroger_Stock_Is_A_Buy_Despite_Unfavorable_Merger”>More…

Peers

The Kroger Co is the largest supermarket chain in the United States. It operates 2,800 supermarkets and multi-department stores in 35 states and the District of Columbia under two dozen local banner names including Kroger, City Market, Dillons, Food 4 Less, Fred Meyer, Harris Teeter, Jay C, King Soopers, QFC, Ralphs and Smith’s. Albertsons Companies Inc is the 2nd largest supermarket chain in the United States with 2,200 stores across 34 states and the District of Columbia. Sprouts Farmers Market Inc is the 3rd largest U.S. supermarket chain with 340 stores across 22 states. Grocery Outlet Holding Corp is the 4th largest U.S. supermarket chain with nearly 300 stores across 23 states.

– Albertsons Companies Inc ($NYSE:ACI)

Albertsons Companies Inc is a grocery store chain in the United States. It is the second-largest grocery store chain in the country after Walmart. The company has a market cap of 14.26B as of 2022 and a Return on Equity of 45.75%. Albertsons was founded in 1939 in Boise, Idaho. The company operates stores under the Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, and Carrs banners. The company also has a pharmacy chain, under the Albertsons Pharmacy banner.

– Sprouts Farmers Market Inc ($NASDAQ:SFM)

Sprouts Farmers Market Inc is a grocery store chain based in the United States. The company offers a variety of fresh and organic produce, meats, and other groceries. As of 2022, Sprouts Farmers Market Inc has a market cap of 3B and a Return on Equity of 21.14%. The company has been growing steadily in recent years, and its strong financial performance is expected to continue in the future.

– Grocery Outlet Holding Corp ($NASDAQ:GO)

Grocery Outlet Holding Corp is a publicly traded company that owns and operates a chain of discount grocery stores. The company was founded in 1946 and is headquartered in Emeryville, California. As of 2022, the company had a market cap of 3.22 billion and a return on equity of 6.43%. The company’s stores offer a wide variety of food and household products at discount prices.

Summary

Investment analysis of Kroger has been mostly positive, with analysts noting the company’s strong operational performance and sound financial structure. However, Kroger’s proposed merger with Albertsons has proved to be less favorably received, as it is seen as a riskier move that may lead to lower returns for shareholders. The company has responded by asserting that it will still be able to grow independently and that the merger will bring value to consumers through lower prices and increased convenience. Ultimately, investors must weigh the potential risks and rewards of investing in Kroger to determine whether the company is worth their money.